Common use of Conversion of Shares; Merger Consideration Clause in Contracts

Conversion of Shares; Merger Consideration. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holder thereof: (a) Each share of common stock, $.01 par value per share, of the Company (the "Company Common Shares") issued and outstanding immediately prior to the Effective Time (after giving effect to (x) the exercise of all options to purchase Company Common Shares issued by the Company pursuant to its stock option plans or otherwise ("Options") as provided in Section 1.10, and (y) the conversion or exercise of all outstanding securities convertible or exercisable into Company Common Shares, but excluding (A) Company Common Shares owned beneficially by Parent or the Acquisition Subsidiary, (B) Dissenting Shares (as defined in Section 1.6) and (C) Company Common Shares held in the Company's treasury) shall be converted into and represent the right to receive one and one-quarter cents ($0.0125) per share (the "Per Share Common Cash Consideration"). (b) Each share of preferred stock, $.01 par value per share, of the Company (the "Company Preferred Shares") issued and outstanding immediately prior to the Effective Time (other than Company Preferred Shares owned beneficially by Parent or the Acquisition Subsidiary, Dissenting Shares (as defined in Section 1.6) and Company Preferred Shares held in the Company's treasury) shall be converted into and represent the right to receive (subject to the provisions of Section 1.9) the following (the "Preferred Consideration"): such number of shares of common stock, $.01 par value per share, of Parent ("Parent Common Stock") as is equal to the fraction: (x) the numerator of which shall be a fraction equal to (A) 95% of the Preferred Purchase Price (as defined below) divided by (B) the Average Closing Price (as defined below); and (y) the denominator of which shall be the Total Outstanding Company Preferred Shares (as defined below). (c) For purposes of this Agreement, the following terms shall have the following meanings:

Conversion of Shares; Merger Consideration. At (a) Subject to the other provisions of this Agreement, at the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company or any Party or shareholder of the holder thereofCompany: (ai) Each each share of common stock, $.01 par value per share, of the Company (the "Company Common Shares") issued and Capital Stock outstanding immediately prior to the Effective Time (after giving effect to (x) the exercise of all options to purchase Company Common Shares issued by the Company pursuant to its stock option plans or otherwise ("Options") as provided in Section 1.10, and (y) the conversion or exercise of all outstanding securities convertible or exercisable into Company Common Shares, but excluding (A) Company Common Shares owned beneficially by Parent or the Acquisition Subsidiary, (B) Dissenting Shares (as defined in Section 1.6) and (C) Company Common Shares held in the Company's treasury) shall be converted into and represent the right to receive one and one-quarter cents an amount in cash equal to ($0.0125A) per share the Adjusted Shareholder Consideration divided by (B) the "Per Share Common Cash Consideration").aggregate number of such shares of Company Capital Stock; and (bii) Each each outstanding share of preferred stock, $.01 par value per share, capital stock of the Company (the "Company Preferred Shares") issued and Merger Sub outstanding immediately prior to the Effective Time (other than Company Preferred Shares owned beneficially by Parent or the Acquisition Subsidiary, Dissenting Shares (as defined in Section 1.6) and Company Preferred Shares held in the Company's treasury) shall be converted into one share of Common Stock of the Surviving Corporation and represent shall continue to be held 100% by Parent immediately after the right Effective Time. (b) The aggregate gross Merger consideration shall be $8,200,000 (the “Gross Merger Consideration”), provided, however, that the Gross Merger Consideration shall be reduced by the following amounts prior to receive any payment to holders of Company Capital Stock and holders of Company Options as provided in Section 1.5(c) below: (subject i) the amount by which the cash of the Company at Closing is less than $225,000; (ii) any payment obligations of the Company due to its employees and/or service providers in the event of a change of control, including any change of control bonuses declared by the Company’s board of directors; (iii) an amount equal to $4,500 set aside for payment to the provisions employees of Section 1.9the Company in consideration for a release of all claims against Parent, the Company and the Surviving Corporation, including claims relating to any Company Options; (iv) an amount of up to $312,000 set aside for payment or reimbursement of relocation expenses to employees of the Company for relocation to a facility designated by Parent; and (v) the following (the "Preferred Consideration"): such number of shares of common stock, $.01 par value per share, of Parent ("Parent Common Stock") as is equal to the fraction: (x) the numerator of which shall be a fraction equal to (A) 95% of the Preferred Purchase Price (as defined below) divided by (B) the Average Closing Price (as defined below); and (y) the denominator of which shall be the Total Outstanding Aggregate Company Preferred Shares (as defined below)Transaction Expense Amount. (c) For purposes Following reduction by the above amounts, the remaining consideration, (the “Adjusted Merger Consideration”) shall be allocated as follows: (i) an amount equal to $1,200,000 shall be deposited in escrow promptly following the Closing as provided herein (the “Aggregate Indemnity Escrow Cash Amount”) pursuant to the Escrow Agreement; (ii) an amount equal to the Net Option Price Per Share shall be payable to the holders of Company Options for each share of Company Capital Stock subject to a Company Option, the exercise price of which is less than the Price Per Share, with amounts payable to a single holder of Company Options aggregated for convenience of payment and rounded up to the next whole cent (such amounts payable to all holders of Company Options collectively and in the aggregate, the “Adjusted Optionholder Consideration”), as consideration for the Merger and a release of all claims against Parent, the Company and the Surviving Corporation (except for claims for payment of the Adjusted Optionholder Consideration hereunder); and (iii) the remainder of the Adjusted Merger Consideration (the “Adjusted Shareholder Consideration”) shall be payable to the holders of Company Capital Stock outstanding immediately prior to the Effective Time, as consideration for the Merger and a release of all claims against Parent, the Company and the Surviving Corporation (except for claims arising hereunder or under the Escrow Agreement for failure to perform). (d) At the Effective Time, the Aggregate Indemnity Escrow Cash Amount shall be delivered by Parent to the Escrow Agent as a contribution to the Indemnity Escrow Fund on behalf of Founder. The Indemnity Escrow Fund shall be held by the Escrow Agent in accordance with the terms of this Agreement and the Escrow Agreement and shall be disbursed solely in accordance with the terms of this Agreement and the Escrow Agreement, the following terms shall have the following meanings:.